Multinational commodities company Glencore has temporarily reduced production at the Murrin Murrin nickel-cobalt operation in Western Australia following a malfunction at an acid plant at the site.. Glencore's Murrin Murrin fully integrated nickel and cobalt operation is located approximately 880km east of Perth in the north-eastern Goldfields region. Short Term. Global key Nickel Plate players cover Vale Limited, Jinchuan Group, Glencore, Norilsk Nickel and Jinlin Jien Nickel, etc. But its obligations dwarfed its available cash and bank credit. Most analysts sided with Xiang, at least in the medium term, believing that nickel production led by Tsingshan and its competitors in Indonesia would outpace demand. (By Jack Farchy, Alfred Cang and Mark Burton, with assistance from Sridhar Natarajan), Your email address will not be published. 2023 Glacier Media Group, All Rights Reserved. For a while, it wasunclear which view of the market would prevail. Pemex Reports $9.4 Billion Loss as AMLO Fails to Revive Output . Poseidon Nickel is listed on the Australian Securities Exchange (ASX) and has a trailing 12-month revenue of around AUDC$256,000. The LME is now very likely going to die a slow, self-inflicted death through the loss of confidence in it and its products, predicted Thompson in a tweet. 4 354 . 2017 - 2018 Yicai Global, Yicai Media Group. LME brokers and their clients were hit with margin call after margin call. Nickel Rim South Mine. Tsingshan has recently threatened in Chinese domestic media to deliver physical metal to the LME, a strong-arm tactic that analysts say would push prices back down. . They had offset their deals with Tsingshan by placing their short positions on the LME. Then on March 7, nickels price began its parabolic ascent, surging from $US30,000 a tonne to more than $US50,000. Nickel prices doubled on Tuesday and briefly rose above a record $100,000 a tonne as banks and brokers rushed to close part of a huge position amassed by Xiang Guangda, the billionaire founder of . Its still unclear how much of a risk the nickel rally and a cash drain from topping up margin payments pose to the company. Most market participants expect nickel prices to come back down once the crisis around Xiangs position has been resolved. Perth, Western Australia, Australia. And that was just for the portion of the short position it held directly on the exchangeabout 30,000 tons. Sr. Exploration Geologist CMDIC Collahuasi 2006 - 2007 1 year. Glencore Nikkelverk AS has a modern and complex processing system. Market speculation has it that Tsingshan has a short position of about 200,000 tons of nickel, which it cannot deliver due to a lack of spot product after being assailed and squeezed out by US and European commodity futures giants such as Glencore, China Securities Journal reported yesterday. Anglo, which produced 59.3 million tonnes of iron ore last year, aims to halve its Scope 3 indirect emissions by 2040. The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. For most of the past decade, they'd traded between $10,000 and $20,000. 02 March 2023. Earlier this week, nickel prices in London spiked byas much as 250%in little more than 24 hours. Last modified on Wed 15 Feb 2023 06.23 EST. Nickels price moved sharply higher in the week after Russias invasion. All prices are listed in Australian Dollars. The head of one London metals brokerage recalls feeling sick as he watched the moves, realising what the spike in prices would mean for his company, the market, and the global metals industry. Many producers, traders, and users of nickel with short positions on the LME were facing margin calls many times larger than they were prepared for. Now they recognised that they had to suspend trading. It decided to cancel all the trades that took place on Tuesday morning some $US3.9 billion of them. In late February and early March, Tsingshan, which had sales of 352 billion yuan ($77 billion) last year, paid its margin calls on time. WATCH: The Chinese tycoon, known as Big Shot in commodities circles is said to be facing billions of losses. And once again, this short squeeze racked up billions in losses for those involved. LMEs Chamberlain defended cancelling the trades. Because nickel resists high temperatures, it is used in special steel and superalloys intended for aircraft engines, among other applications. He said UBS . For most of the past decade, theyd traded between $US10,000 ($13,700) and $US20,000. Those past scandals forced reforms on the exchange. Why bet against nickel when you have a nickel business? Then came a geopolitical crisis that caught him unawares. While Russias nickel exports havent been targeted by sanctions, US and European buyers have nonetheless sought alternatives to Russian sources. Its not just a casino. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Company says it puts it into the league of the largest undeveloped nickel deposits in the world. Born in 1958, he started out making frames for car doors and windows in Wenzhou, in eastern China. This was the most disorderly move in a metal Ive seen in my career, says Mark Hansen, CEO of trading house Concord Resources. For the LME to cancel nickel trades between willing buyers and sellers is unforgiveable. Copper. It was 5:42 a.m. on March 8 in London when the nickel market broke. For most of the past decade, theyd traded between $10,000 and $20,000. While investors who sell stocks short want the price to drop, in commodity markets many producers, traders, and users take short positions as a hedge against losses on the physical commodities they hold in inventories. Once its industrial complex reaches peak p. Xiang wanted to increase Tsingshans production dramatically by producing so-callednickel mattefor electric vehicle batteries. They include: Koniambo is a large-scale integrated ferronickel mining and processing complex. We produce some of the worlds purest nickel. . Save my name, email, and website in this browser for the next time I comment. During the fiscal year 2021, the Swiss-based company Glencore reported a nickel production of some 102.3 thousand metric tons. https://bbgvod-azure-us-east1-zenko.global.ssl.fastly.net/vod/vod/m/ODg0NDM2Mg/Q2xvdWRfNTgyODY2/3fb888db-fa8e-42e4-b488-726dae69584b_150.mp4, Nickel price spike purely financial but Tsingshan effect could linger, EV Nickels stock soars after announcing enormous maiden mineral resource in Ontario, Iron ore price jumps on China data, bullish steel demand outlook, Copper price rises as Chinas economy shows strong recovery, Gold price hits 1-week high on robust China economic data, Musk tamps down speculation that Tesla will mine lithium, Monumental shift in way junior mining stocks are valued is coming, Advance Lithium in joint venture talks with Mexicos national lithium company, Goldman warns carmakers against buying miners: It always end in tears. At the time of the LME's trading halt, nickel had gained more than 230% in March. Then, as now, a key factor was the intervention of the exchange. Now, people familiar with the matter say, the exchange is likely to introduce such measures as position limits and greater transparency. Anyone using the LME needs to understand that. I'll discuss why. Leeuwin managing director Chris Piggott was a senior geologist at ASX-listed Bellevue when it defined its core discoveries, and was part of the team that defined the greenfields Nova-Bollinger. Shanghai's most-traded nickel futures contract . Already at an all-time high by 5:42 a.m., it lurched higher in stomach-churning leaps, soaring $30,000 in a matter of minutes. The Murrin Murrin Mine is a major nickel-cobalt mining operation being conducted in the North Eastern Goldfields, approximately 45 km east of Leonora, Western Australia.The project was initiated as a joint venture between Murrin Murrin Holdings Pty Ltd, a wholly owned subsidiary of Anaconda Nickel Limited (whose share was 60%) and Glenmurrin Pty Ltd, a wholly owned subsidiary of Glencore . And when those wagers move violently in the opposite direction, they can be hit with huge margin calls, or requests to put down more cash to back their trades. Some traders and bankers have questioned whether a producer like Tsingshan, which has relatively low production costs and is active in all parts of the supply chain, really needs such a large hedging position. At 8.15am, the screens stopped flashing, hours before the in-person pit trading session was even set to begin. In terms of revenue, the global largest two companies occupy a share . The LMEs history dates back to the early 19th century, when metal traders drew a circle in the sawdust on the floor of the Jerusalem Coffee House in the City of London. Formerly called Companhia Vale do Rio Doce, Vale is a diversified multinational metals and mining company founded in 1942, and headquartered in Rio de Janeiro, Brazil. Glencore's disclosure follows a forecast earlier this month that there needs to be greater investment in nickel production, even though the short-term picture suggests there will be a glut of the metal. Nickel is a raw material that is characterized by exceptional resistance and special properties, thanks to which it has many applications. However, reports that Beijing is mulling a rescue deal for Tsingshan Holding Group , the company behind nickel's big short . Trafigura Group sold cargoes of nickel it now believes may not have contained any of the metal to buyers including a US trade finance firm and a state-owned Jack Farchy on LinkedIn: Trafigura's Non-Existent Nickel Was Bought by a US Firm 2023 Glacier Media Group, All Rights Reserved. For participants in commodities exchanges, a price rally is not necessarily good news. At that time of day, bleary-eyed traders are typically just glancing at prices as they swig coffee . One thing is sure: If Xiang can weather the storm, Tsingshans nickel-producing assets stand to benefit from the higher prices, offsetting losses from the short. The paper loss stood at $8 billion on Monday, before violent moves in nickel prices led the London Metal Exchange to suspend trading in the metal on Tuesday, one of the people said. Tsingshan has recently threatened in Chinese domestic media to deliver physical metal to the LME, a strong-arm tactic that analysts say would push prices back down. Born in 1958, Xiang founded his business more than 30 years ago as a workshop making frames for car doors and windows in Wenzhou, eastern China. Tsingshan started building its short position last year in part because Xiang expected a nascent surge in nickel prices to fade, according to people familiar with the matter. The operations also include the Sudbury smelter. Including positions on the London Metal Exchange and bilateral bets with banks, Xiang still has short holdings in the region of 150,000 tonnes, the people said. In theory, there should be two options for this 200,000 tons of nickel short order: 1. The company paid at least some of its margin calls early on Monday, according to a person familiar with the matter. Everything changed when Russia invaded Ukraine. The LME suspended nickel-market trading on Tuesday and the Shanghai Futures Exchange followed suit a day later, after prices on Chinas top commodities bourse hit their daily upward limit. Hansen of Concord Resources argues that financial investors who traded nickel last week should have been prepared for the LME to step in. Xiangs short position has now racked up billions of dollars in losses. The nickel market was anything but calm. Furious investors and traders. Long Term . Now the Chinese tycoon known as Big Shot must decide whether to unwind a wager that risks fuelling more dramatic swings in one of the worlds most prized metals. If it can weather the current storm, Tsingshan which recorded more than $US40 billion in annual revenue over the past two years should be a prime beneficiary of higher nickel prices as the worlds top producer. Nickel. Related Article: Nickel price spike purely financial but Tsingshan effect could linger. . Shares in metal recycler Sims Metals hit an 11-year high of $19.55 today following a price target increase by UBS analyst Lee Power on Tuesday from $18.90 to $20.30. Senior Mine Engineer. 3.28% . ICP( B2-20050348 (AVSP):2014002, By signing up, you agree to our Terms, Privacy Policy. As the price rose through the London day after offices in Asia had closed, Tsingshan started struggling to pay, the people say. The production of Glencore Nikkelverk in 2019. . In the short term, a package of loans from Chinese and international banks will help Tsingshan meet its immediate liquidity squeeze. But while the short squeeze has weighed on Tsingshan's . At the current price of nickel, the brokers themselves wouldnt be able to pay their margin calls, they told the LME. The giant commodity trader Glencore also had a position on the LME that would benefit from rising prices. It was 5.42 am on March 8 in London when the nickel market broke. By early this year, it had taken ownership of more than half of the available nickel in LME warehouses. Crucially, the decision meant traders wouldnt need to pay margin calls on the basis of the $80,000 nickel price. Certain sections of this system have been patented. As Contract Writer / Coordinator, you will be part of the Contract Team, which is a team within the Coal Department. Its also one of the most important raw materials needed in making batteries for electric vehicles. As of the evening of March 13, the LME had yet to announce a date for nickel trading to resume. This type is different from the mainstream ferro-nickel and nickel pig iron. He started increasing his short position on the London Metal Exchange. Their GLEN share price forecasts range from GBX 540 to GBX 740. INF News.com. The company had plans to produce 850,000 tonnes of nickel in 2022, an increase of 40 per cent in a year, says a person briefed on them. Glencore is one of the largest miners in the world that supply copper and nickel, two of my essential CCLANGs for the future of electrification. Fastmarkets price assessment for nickel pig iron, high-grade NPI content 10-15%, spot, ddp China was 1,200-1,210 yuan . There are also traders making plans to abandon the LME nickel contract, a move that would reduce market liquidity, making it harder for everyone from miners to car companies to manage their exposure to prices and access financing. Nickel prices usually move a few hundred dollars per tonne in a day. The company has assured creditor banks in China that its . Tsingshan accounted for about half that amount. Vale and Glencore announced today that they've entered a partnership to begin a feasibility study to explore Nickel Rim South. The show will focus on global macro issues with a middle eastern context, provide expert analysis of major market moving stories and speak with the biggest newsmakers in the region. Executives at Tower Research Capital, one of Wall Streets oldest electronic market-makers, reined in its trading activity on the LME and put its membership in the exchangeunder review. Glencore Nickel. Tsingshan Group is the partner of Huayou that develops the nickel project. Xiang was aware of flaws in his strategy, people familiar with the matter said. Glencore Nickel. Raglan Mine is a large nickel mining complex in the Nunavik region of northern Quebec, Canada.It is located approximately 100 kilometres (62 mi) south of Deception Bay. Xiang isnt just a financial trader making paper bets on price moves. Now they had to pay big margin calls on the exchange while receiving no margin from their client. Nickel prices usually move a few hundred dollars per ton in a day. Despite the recent upheaval, his company still remains the biggest in the nickel industry. But its obligations dwarfed its available cash and bank credit. In late February and early March, Tsingshan, which had sales of 352 billion yuan ($56 billion) last year, paid its margin calls on time. Glencore plc was newly . But its extremely unusual for an exchange to cancel whole sessions of trading after the fact. The LMEs special committee held another call at about 6 a.m. Now they recognized that they had tosuspend trading. Rio Tinto, the world's second-largest mining company by market capitalization, last week said it would lift annual capital investment to as much as $10 billion in 2024 and 2025, up around 25% on . He draws a comparison with Silver Thursday, the day in 1980 when an attempt bythe Hunt brothersto corner the silver market came unstuck. Several large brokers got margin calls of close to $1 billion each over the course of the day. Tsingshan needs to increase the contract margins or roll over the futures if it decides to keep the contracts, which would require a huge amount of cash, an analyst told Yicai Global. Even at that level, clients of LME brokers had failed to pay some $US500 million of margin calls in relation to their short positions on the exchange, says a person familiar with the matter. Excellent coverage of an earth-shaking event. Since 1910, nickel and other metals have been refined, produced and exported from the production plant in Kristiansand. Nickelcopper ores have been mined there since 1928. Your email address will not be published. 6W - 9M. Trading and mining giant Glencore Plc was the dominant holder of nickel in recent months, according to people familiar with the matter. Today, in addition to its electronic market, its one of the last exchanges where brokers still gather in person to yell orders at one another for part of the day. 15 Feb 2023 06.23 EST the nickel project of a risk the nickel rally and a drain! A key factor was the dominant holder of nickel short order:.! Facing billions of losses cancel nickel trades between willing buyers and sellers is unforgiveable dominant holder of nickel short:... That is characterized by exceptional resistance and special properties, thanks to which it has many applications that. 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